Convenience Shop franchise aims for 100 stores by 2027

Members of the group developing the Shoreline complex at Smart City, have issued a €2 million bond to finance a stake in retail food chain The Convenience Shop.

The proceeds of the bond will be used by the company Gaia Investments to settle amounts due to EZ Holdings for its 25% acquisition of grocery chain The Convenience Shop Holdings (TCSH).

The TCSH Group competes primarily in the mini-market segment, a highly competitive market in Malta that includes both domestic and international brands setting up franchises and chains.

TCSH is also issuing its own €5 million bond, to finance a €2.7 million acquisition of various groceries and stores and €1.04 million in minority stakes in other shops, including Daily Foods Limited, Furnata Ltd, Crust Limited, and Mqabba Shop Co Ltd. Of this, €1.54 million will be used to repay balances due to shareholders who reduced their effective shareholding in the new group due to the restructuring that included buying out minority shareholders.

Another €1,500,000 will be used to finance new shop openings over the coming years, with an average of two new store openings per annum up to 2027, resulting in a total of 100 stores.

Convenience Shop Holdings’ executive director Joseph Pace started as the owner of JPS Supermarket in 2001, and expanded the franchise from one shop in Zebbug to over 55 shops over a span of 10 years, using his own Marant Food Products as supplier.

The net proceeds from the bond issue, amounting to some €1.94 million, will be used as a loan to the companies Chester Holdings and Middletown Investments (€1.7 million in equal amounts between them), to loan out to Gaia Investments.

Of this, €200,000 and €848,706 will be used to finance the share transfer agreement from EZ Holdings, and €651,294 will be retained by Gaia Investments for general corporate funding.

Lawyers Kenneth Deguara, Kevin Deguara, and Jean Carl Farrugia, of DF Advocates, are owners of Chester Holdings, which holds a 50% stake in Gaia Investments.

The other 50% is owned by Middletown Investments, a company owned by Farrugia and Kevin Deguara. The bond issue will finance Gaia’s 25% stake acquisition in TCSH. Middletown also owns a 30% stake in Shoreline Holdings, the luxury apartment block to be constructed within Smart City. EZ Holdings is owned by Emanuel Zammit.